DirecTV Shows a Need for AT&T

[Commentary] The world has become a tougher place for DirecTV since 2010, when AT&T unsuccessfully tried to buy the satellite-TV operator.

After years of outperforming the rest of the pay-TV industry, subscriber growth has slowed sharply while programming costs are rising and cheap online video alternatives are multiplying. In response to changing market conditions, DirecTV's satellite-TV rival Dish Network has invested billions of dollars in trying to diversify into wireless broadband and launch its own online-video service. DirecTV, in contrast, has bought back stock -- lots of it. The company has spent $29.7 billion on repurchases in the past eight years, according to regulatory filings. DirecTV has taken some steps to develop online-video services but it isn't as advanced as Dish, which hopes to offer its service beginning this summer, people familiar with the matter say. DirecTV's strategic position is in the spotlight now that AT&T has come back with yet another approach. A person close to the situation says DirecTV, which became independent in late 2009 when its then-biggest shareholder Liberty Media Corp. divested its stake, is likely open to a sale. The company's board, say people familiar with the situation, is concerned with satellite TV's Achilles' heel: its inability to offer an Internet-access broadband service competitive with the packages delivered by cable and phone companies.